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TacklingPoor Performance

M Strebler

Report 406

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Other titles from IES:

The Drivers of Employee EngagementRobinson D, Hayday S, Perryman SIES Report 408, ISBN 1 85184 336 1

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A catalogue of these and over 100 other titles is available from IES,or on the IES Website, www.employment-studies.co.uk

Marie Strebler

Tackling PoorPerformance

Report 406

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Copyright © 2004 Institute for Employment Studies

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British Cataloguing-in-Publication Data

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ISBN 1 85184 339 6

Printed in Great Britain

v

The Institute for Employment Studies

IES is an independent, international and apolitical centre ofresearch and consultancy in human resource issues. It worksclosely with employers in the manufacturing, service and publicsectors, government departments, agencies, and professional andemployee bodies. For over 30 years the Institute has been a focusof knowledge and practical experience in employment andtraining policy, the operation of labour markets and humanresource planning and development. IES is a not-for-profitorganisation which has over 60 multidisciplinary staff andinternational associates. IES expertise is available to allorganisations through research, consultancy, publications andthe Internet.

IES aims to help bring about sustainable improvements inemployment policy and human resource management. IESachieves this by increasing the understanding and improving thepractice of key decision makers in policy bodies and employingorganisations.

The IES Research Networks

This report is the product of a study supported by the IESResearch Networks, through which Members finance, and oftenparticipate in, applied research on employment issues. Fullinformation on Membership is available from IES on request, orat www.employment-studies.co.uk/networks/

vi

Acknowledgements

The author would like to acknowledge the assistance given bythe employers who participated in the study and the rich insightsprovided by their staff. The author would also like toacknowledge the very helpful contribution and suggestionsmade by Wendy Hirsh to the review of an early draft. Thanksalso to Michael Silverman for conducting the literature review.Gwen Leeming ensured that the production went smoothly,Rachel Jordan provided a very helpful editing service and AndyDavidson his usual professional media expertise. Finally, and notleast, the author is grateful for the financial support of themembers of the IES Research Networks without whom this studywould have not seen the light of day.

vii

Contents

Executive Summary ix

1. Why Tackle Poor Performance? 1

1.1 Poor performance: a hard issue to tackle? 21.2 Research questions 31.3 Research approach 4

Defining Poor Performance 5

2.1 The business drivers 62.2 The HR agenda 72.3 The union agenda 82.4 What do employers mean by poor performance? 82.5 Understanding poor performance 102.6 The legal framework 14

Measuring Poor Performance 17

3.1 What is acceptable? 173.2 The performance measures 193.3 Poor or simply not the best? 233.4 Crossing the line: the grey areas 25

Dealing With Poor Performance 28

4.1 Organisational approaches: improve or remove? 284.2 The capability procedure 324.3 Are line managers equipped to deal with it? 354.4 Termination of employment 37

viii

5. Tackling Poor Performance: The Strategic Choices 38

5.1 Weeding out small numbers 385.2 Losing the worst, keeping the best 395.3 Improving performance 39

Bibliography 40

ix

Executive Summary

Poor performance is an issue that worries managers andemployees alike. It is of concern to senior managers because it isa measure of how effectively the organisation is led. But peoplein organisations do not always feel their organisation tacklespoor performance appropriately — a hard nut to crack. Dealingwith poor performance is an emotive issue. It is perhaps notsurprising, therefore, that many organisations fail to address it. Inour research, seven large employers shared their perspectives onthe issue.

Why tackle poor performance?

Research evidence shows that:

tackling poor performance is still fairly low on the agendafor employers

poor performance reduces productivity managers find it uncomfortable and would rather ignore it it has a negative impact on other staff motivation and

retention.

What do we mean by poor performance?

Among the seven employers participating in our study,interpretation seemed to be influenced by what was going on intheir business at the time and this was what had prompted areview of their approach. But managers were quick in thinking ofindividuals, coming up with colourful labels stemming frombehaviours such as attitude and lateness. So organisations mayhave a vague idea of what they mean by poor performance, but

x

people can quickly acquire a poor performer label. A ‘workerwith attitude’ may be trendy in certain circles, but if it is thewrong attitude, seen in lack of co-operation with colleagues, itmay lead to the employee being removed.

When is poor performance real anyway? That which can beconstrued as true poor performance may be small indeed, whenwe take account of factors that may have an impact onperformance, such as sickness. However, the picture is quiteconfused when we consider that poor performance can resultfrom role overload or unclear objectives or unrealistic targets.Changes to the work environment would probably raise the levelof performance. On the other hand, absence (which can again beseen as a sign of poor performance) or a personal or a domesticproblem, may be better handled by Occupational Health.Perhaps the clearest boundary is the overlap between behaviourand attitude, with misconduct. If the employee is dishonest andunethical, there are strong reasons for invoking the disciplinaryprocess and ultimately exit. Poor performance is legally definedas ‘when an employee’s behaviour or performance might fallbelow the required standard’. Dealing with poor performance is,however, a legal minefield. This might explain why someemployers tend to confuse poor performance with negligence,incapacity or misconduct.

What is acceptable performance?

Employees need to know what constitutes an acceptable level ofperformance, below which their organisation will consider theirperformance is wanting. This is not so easy when we look at thevariety of messages that they may receive from their employersabout performance requirements. Given that these often conflict,it may be difficult for an individual to have a clear view of whatis meant by acceptable. The onus is, therefore, on line managersto instil some much-needed clarity, and on both parties to agree astandard of performance as well as the targets to be delivered.

Much emphasis was given by our employers to addressperformance issues informally and as soon as they arose — andmost likely outside the performance appraisal process. This wasoften referred to by the managers we interviewed as ‘micro-managing’ (eg setting clear expectations and monitoring progress).Since the outputs achieved are key, failure to achieve them would

xi

obviously be a signal for investigating the level of performancefurther. To this end, most of the HR managers interviewed saidthey ‘would turn to the list of objectives set as the cornerstone formeasuring poor performance’. It is therefore debatable as towhether this does not form part of an effective performancereview process in the first place. To confuse us further, there arealso many ways that employers in the study measured employees’level of performance to assess whether it is good or bad. All ouremployers were using both hard and soft measures and differedin the ways they sought these measures, how they combinedthem to obtain a rating, and in what kind of benchmark theyused. Competency frameworks can be useful to spell outunequivocally the actions that are not helpful to the business.

But is the employee poor or simply not the best? Employersjudged this with the controversial concept of forced ranking —whether the performance is relative (eg compared to bestperformers) or absolute (eg against a standard). The process ofstandard monitoring or calibration, that most adopted to ensurethe consistency, and fairness of the overall rating, may serve toassuage employees somewhat, given the universal dislike offorced ranking and organisational league tables. Crossing theline below acceptable performance may involve employeeslacking capability or displaying inappropriate behaviour.Crossing the line presents a rather complex picture — the greyareas:

what makes a good day’s work? are culturally-defined behaviours involved? is the employee in control and willing?

Tackling poor performance

All employers participating would review their selection processto avoid recruiting poor performers in the first place. Butorganisations need to put in place an overall approach andprocedure to deal with poor performance. Approaches weencountered take on two important, but diametrically opposed,dimensions:

whether the organisation’s ultimate aim was to improveperformance or remove the employee

xii

the degree of formality of the procedure used to achieve thisaim.

Some organisations adopted a developmental approach, believingthat employees’ performance could be improved. Theirintervention therefore included a sharper focus on training anddevelopment. In this case, a varying degree of formality of theprocess used was also in evidence. Towards the more formal endof the procedure, but still with an improvement emphasis, wefound the approach that a manufacturing organisation haddeveloped, ending in a performance improvement plan. At theother end of the spectrum lies the approach adopted by anelectronics company that believed in informally matching peopleto roles according to their strengths.

We found no evidence amongst the employers in our study of theuse of ‘getting rid of bottom 10%’ approach. But pressure to movetowards such an approach could be sensed. A central governmentagency, for example, used an assessment centre to review thecapability of its senior managers. Either explicit — or implicit —the list of poor performers seemed ubiquitous. But poorperformance needs to be destigmatised and regularly talked aboutin a sensitive way. The capability procedure is also the means todocument performance issues, which is the key to being able toact. However, evidence also needs to be collected earlier on aspart of the appraisal process. Most organisations should clearlyspell out the link or the difference between their capability anddisciplinary procedures, as the boundary is often blurred.

The most common message emerging from the study is the needfor managers to deal with issues early rather than let them getworse. We would like to offer them the following mnemonic asan illustration of good practice. In most cases, dealing with poorperformance is a bit like turning on the taps:

Turning on the taps: encouraging line managers to deal with poor performance

T timely and early

A appropriate management style and response

P keep it private

S make it specific to performance and factual

Source: IES

xiii

The strategic choices

Employers need to decide what they are really trying to do withpoor performance.

Weeding out small numbers has a big impact on the rest ofthe workforce, giving the message that the organisation isserious about tackling poor performance.

Losing the worst, keeping the best is clearly in vogue in theUnited States. This is about ratcheting up organisationalperformance by getting rid of the lowest performers (oftenaverage rather than poor). It can be legally difficult to defendand is disliked by employees.

Improving performance may be better conceived as re-energising people and improving their skills andcommunication. This approach works if organisations adopta collaborative approach, where senior managers work withcolleagues to support the line to maximise contribution.

xiv

Tackling Poor Performance 1

Summary

1. Why Tackle Poor Performance?

poor performance is a hard issue to tackle

a need for practical solutions for line managers

key research questions are to define, measure and manage it

contributions from seven large employers

the report explores strategic and practical choices

Poor performance is an issue that worries managers andemployees alike. It is of concern to senior managers because it isa measure of how effectively the organisation is led. But peoplein organisations do not always feel their organisation tacklespoor performance appropriately — a hard nut to crack. Dealingwith poor performance is an emotive issue. It is perhaps notsurprising therefore that many organisations fail to address it.

‘People can face almost any problem except the problem of people… Faced with problems of people, management will go into a stateof paralysis.’ (Deming, 1992)

Yet nowadays organisations are faced with such businesspressures and cost constraint that they can no longer ignore poorperformance, as aptly illustrated by one manager.

‘Gone are the days in which organisations could afford to carrypassengers.’ (Senior manager in a manufacturing organisation)

This research project was commissioned by the corporateMembers of the Research Networks on reward and performancemanagement. The aim of the study was to examine the

Institute for Employment Studies2

difficulties of tackling poor performance in organisations and theneed for organisations to have clearer processes.

1.1 Poor performance: a hard issue to tackle?

It is a big issue but research evidence suggests it may beperceived as such by employees more so than by theirorganisation.

1.1.1 It is an issue but fairly low on employers’agendas …

Recent survey data suggest that dealing with poor performanceis still fairly low on some employers’ agenda. Axelrod et al.(2002) reports that only 19 per cent of the 13,000 US seniormanagers questioned, in 112 organisations, believed that theirorganisation dealt with poor performers quickly and effectively.This lack of attention seems to cut across all continents andsectors as an IES survey on the quality of life in London NHSTrusts also shows (Robinson et al., 2001). In 2001, 44 per cent ofthe 34,000 employees responding across 45 Trusts stronglyagreed or agreed that ‘poor performance is tolerated in this Trust’compared with 22 per cent who disagreed or strongly disagreed.

1.1.2 … that line managers would ratherignore …

Managers find the process wholly uncomfortable, and manywould rather turn a blind eye. Mercer’s survey of 2,600employees in the US shows that only 29 per cent thought that‘employees in my department who perform poorly are appropriatelymanaged’, and 26 per cent that ‘my manager regularly coaches me onimproving my performance’ (Mercer, 2003). So in the short-term,many managers may find it easier to avoid confronting poorperformers. As Guffey and Helms (2001) argue, this may be dueto a variety of reasons including managers’ needs for affiliationwith their employees and their desire to avoid the risk ofdamaging a good working relationship. Lack of seniormanagement support may also prevent them for fear it reflectson them badly. Sometimes it can simply be that recruitment canbe a very time consuming activity (Kearns, 2000). Overworked


managers are likely to tolerate poor performance simply becausean extra pair of hands is better than none at all.

1.1.3 … yet it has a negative impact on themotivation of other staff

Most employees expect their organisation to deal effectively withpoor performance, and some would be happy if theirorganisations acted more aggressively on poor performers(Axelrod et al., 2002). Perceptions of whether poor performance isaddressed also impacts on the perception among staff of theirorganisation, although it is not possible to say which is cause andwhich is effect. Thus, 60 per cent of respondents, in the IES NHSsurvey cited previously, who rated the trust as a worse place towork, compared with two years ago also disagreed that poorperformance is managed compared with 41 per cent who ratedthe Trust as better. Interestingly, this research shows that failingto deal with poor performance may have some impact onretention. Over half of those who believed their Trust does notdeal with poor performance also indicate they were likely toleave the organisation within the next year, compared with 41per cent of those likely to stay. This is compounded by the factthat poor performers tend to stay in their organisation (IRS,2003).

Evidence so far shows that poor performance is a problem leftfairly unchallenged in many organisations, that impacts on staffperception of their organisations and that managers have a keyrole to play in eradicating.

1.2 Research questions

Discussions with Research Network Members coupled with IESresearch and consultancy experience led us to address threebroad areas:

What do we mean by poor performance? How do organisations measure poor performance? What are the approaches that employers adopt to tackle poor

performance successfully?


1.3 Research approach

The project included:

A literature review to identify the main trends and issues. Visits and discussions with seven employers in different

sectors (finance, manufacturing, electronic, retail, central andlocal government).

A review of some employers’ policies and practices.

The remaining chapters discuss the difficulties of tackling poorperformance in organisations, illustrated with the practices weencountered in the seven employers participating in the research.Chapter 2 examines research evidence about the drivers toaddress poor performance and how employers define poorperformance overall. Chapter 3 investigates the benefits andpitfalls of using traditional methods for measuring poorperformance. Chapter 4 discusses the approaches introduced byemployers to deal with poor performance. Chapter 5 concludesby exploring the strategic choices that are available to employersin the approaches they use to deal with the issue. We begin witha discussion of what is meant by poor performance.


Summary

2. Defining Poor Performance

Poor performance:

impacts on business performance

impacts on other peoples’ performance

is complex to define.

The proportion of true poor performance:

may be small

has multiple causes not all due to the individual

can lead to litigation if not handled well.

While poor performance is not a new issue for organisations,there seems to be a dearth of research to help organisations dealwith the problem. Understandably perhaps, most textbooks onperformance management concentrate on performance assessmentand development, and do not cover poor performance in anygreat depth. Yet organisations can no longer afford to ignore theissue. In this section we discuss some of the reasons underlyingthis renewed interest:

the pressure of business drivers and changing HR and unionagenda

the ways poor performance is construed and factors that mayimpact on its definition

the consequences of the legal framework.


2.1 The business drivers

The business agenda is increasing the pressure on organisationsto address the issue of poor performance. This is in response to anumber of drivers:

Remaining competitive: the productivity agenda shouldfocus organisation’s minds on improving individualperformance, often it can shift attention to satisfyingshareholders needs and the City.

Reward for failure: As recent media coverage of CEOfailures suggests, the higher in the organisational hierarchy itis the more likelihood poor performance will be rewarded.None of the big institutions mind rewarding success; theproblem is when executives enjoy big bonuses for mediocreor poor performance — the so-called ‘golden parachute’.Prudential has had to rethink its executive bonus scheme.The Myner’s report has urged institutional shareholders totake a more active role in the companies they own. In somecases this is about better management costs (The Herald,2003).

Customer satisfaction and the impact of employeeengagement. Employees are key to customer satisfaction. Inorder to become ‘employer of choice’, employers need tothink about employees in the same way as customers andput in place good management practices (Hay Group, 2002).

Modernising government agenda. This stresses the need forincreased productivity and raising performance, particularlyleadership and management skills via a sharper performancemanagement process which is also designed to tackle poorperformance.

Quality and business models. The development of modelsof success to benchmark company performance againstbusiness models, eg EFQM etc.

External measurement and auditing. This includes theincrease in measurement and audit processes in the publicsector, such as the Comprehensive Performance Assessment(CPA) and OFSTED and others’ league tables.


2.2 The HR agenda

Many organisations will be concerned that implementing asystem to identify poor performers will create a wider feeling ofresentment and negativity among employees (Stanton, 2000).Employee reactions to monitoring are important, not onlybecause organisations have a strong stake in maintaining bothemployee motivation and well-being, but also because the way inwhich monitoring is conducted will influence the amount ofeffort that employees address to different tasks.

2.2.1 Duty of care

Employers have now a more explicit ‘duty of care’ towards theiremployees than ever before (Bevan and Hayday, 2001). Both UKand EU legislation, together with case law, have made employersmore aware of the need to safeguard the physical andpsychological well-being of their employees. There is much beliefplaced in the power of policies and systems to deal with people’sproblems.

2.2.2 Human capital measurement

The focus on employees and their added value has also beenemphasised by the current interest in measuring human capitalas an asset in the same way as other assets. This stresses thathuman capital is to do with both employee capability andcommitment, and what skills, knowledge and experience areavailable to the organisation, and how contribution is maximised.

2.2.3 Developing people

The Investors in People (IiP) standard has had much impact onensuring that organisations develop its people effectively todeliver improved organisational performance via theperformance management process. In particular, cascadingorganisational objectives to individual objectives and ensuringthat employees, as well as managers, are equipped with the skillsand training to deliver these. Research shows that one in five ofthe 1,567 employers surveyed believed that the investment inpeople required to achieve the IiP recognition had significantlyincreased the productivity of their people (IiP/NOP, 2001).


2.3 The union agenda

The advent of partnership at work, and the need for unions tomove from an adversarial agenda to an aspirational agenda toenable people to get on at work, may serve to shape employeerelations more than it has hitherto. The Unions 21 discussionpaper (2003) set in particular their kind of labour market visionwith some of the following characteristics (adapted from Whatnext for the unions? p. 7):

fair pay (including equal pay for work of equal value) and anarrower dispersion of incomes

the absence of discrimination on grounds of race, gender,sexuality, disability or age

secure and interesting jobs that workers find fulfilling a style and ethos of management based on high levels of trust choice, flexibility and control over working hours access to skills development and training.

Aside from statutory rights (more on this in the legal frameworkbelow), most of these characteristics depend on the unions beingable to develop a more aspirational agenda with employerswhere they currently have a narrow membership base.Nevertheless, some aspects of the union agenda are bound toconflict with business and HR priorities.

2.4 What do employers mean by poorperformance?

We were interested to discover whether the drivers in bothexternal and internal environments had had much impact on theway our case studies thought about poor performance overall.

2.4.1 Influenced by business pressure …

In most of our case studies, the definition of poor performance atthe organisational level seemed to be prompted by what wasgoing on in their business at the time, which led to a review oftheir approach to dealing with poor performance.


The need to address poor performance arose when:

• A new Chief Executive of a government agency wanted to movefrom a family environment to a seller of products operating in theprivate sector.

• A comprehensive performance assessment exercise at the CountyCouncil had generated some low ratings in some weak areas.

• A manufacturing organisation wanted to extend its developmentculture to include all levels of performance.

• The retail company was reviewing its approach to performancemanagement, to examine whether a standardised process wouldhelp to raise the performance level in some parts of theorganisation.

• The service section of a central government department had beenreviewing its procedure to detail actions under capability andseparate it from conduct, which had even more negativeconnotations.

• The team of a financial service in the City had dealt with theremoval of a long serving manager who was poorly performing.

• An electronic company believed that roles could always be found tomatch the strengths and preferences of the employees it wanted toretain.

2.4.2 … but a vague overall notion

In general, most of the HR managers interviewed in our casestudy organisations seemed rather vague when asked ‘what doesyour organisation mean by poor performance?’. When probed forindividual examples, however, they were quickly able to think ofpeople. So although organisations may not have an overalldefinition, people can quickly acquire a poor performer label.There is plenty of research evidence to show that we tend to noticeand remember negative events more. The fact that intervieweeswould often come up with observed behaviours, such as attitude,absence, lateness etc. further reinforces the point.

Common messages emerged from the cases studies, whichvividly demonstrate the somewhat biased environment in whichour attempt to define poor performance operates.


The common messages emerging from employers are that:

• they can’t carry people

• micromanaging takes time

• labels stick

• poor performance is often ‘brushed under the carpet’

• where you are in the organisation, and the power you have, isimportant.

2.5 Understanding poor performance

2.5.1 When is poor performance real anyway?

Figure 2.1 depicts the interaction of different facets ofperformance, not all of which can be defined as poorperformance. What could be construed as true poor performancemay be small indeed when we take account of other ways poorperformance might be defined.

At the core of the picture are the elements of performance oftenassociated with poor performance. A ‘worker with attitude’ maybe trendy in certain circles, but if it is the wrong attitude, seen in

Figure 2.1: What is true poor performance?

Workattitude

capabilitybehaviour

Misconduct

Personalcircumstances

& sickness

Job design

Outputmeasurestargets

Source: IES, 2004


lack of co-operation with work colleagues, it may lead to theemployee being removed. Similarly, the lack of capability to dothe job would result in poor performance. However, the pictureis quite confused when we consider that poor performance canresult from role overload, unclear objectives or unrealistictargets. Changes to the work environment would probably raisethe level of performance.

On the other hand, absence (which can again be seen as a sign ofpoor performance) or a personal or domestic problem may bebetter handled by Occupational Health. Perhaps the clearestboundary in the picture is the overlap between behaviour andattitude, and misconduct. If the employee is dishonest andunethical, there are strong reasons for invoking the disciplinaryprocess and, ultimately, their exit.

2.5.2 Potential causes of poor performance

It may be easier then, as Figure 2.2 shows, to think of poorperformance in terms of the factors that may have caused it, or atleast have preceded it. There are many ways that poorperformance might be defined by an organisation and different

Figure 2.2: Factors that may impact on individual performance

Organisational factors

• downsizing• culture• resourcing• job design/induction• job transition• work loading• flexible working

Line-manager factors

• management style• setting standards• coaching and support• consistency and fairness• engagement and

commitment

HR factors

• selection• performance

management system• training• equal opportunities• family-friendly• work-life balance

Individual factors

• capability and skills• behaviours and attitudes• efforts• absence and sickness• personal circumstances• background

ind iv idual perfo rmance

Source: IES, 2004


perspectives depending on the level at which it is addressed andthe key player involved. While the factors below might not alllead to poor performance, their presence may have some impacton the likelihood that individual performance may end up beinglabelled as poor.

Organisational factors

At the organisational level, we may find the following factorsimpacting on individual performance:

The culture of the organisation. Some may believe that allpoor performers can be developed in order to improve theirperformance, and that they should invest indefinitely in theirpoor performers. Conversely, other organisations may havea ‘blame’ culture, where it is difficult to address performanceissues. This may be the difference between whether poorperformance is ‘talked about’ or ‘brushed under the carpet’.

The resourcing strategy of an organisation. This mayinvolve downsizing putting pressure on the people whoremain: the so called ‘survivor syndrome’.

Job design and work loading. Flatter structures enlarge jobsand push down a level of responsibility, with consequentpressure on more junior staff. It may be the individualsimply doesn’t know what to do. The job may be poorlydesigned or there may be a mismatch between capabilitiesand job content.

Job transition and induction. Duncan (1997) believes peopleare not necessarily poor performers themselves, but ratherthe environment in which they find themselves affects them.For example, a new manager who has been recentlyappointed is struggling to make an impact, downgradingmanagement’s view of his potential.

HR factors

Wrong selection and recruitment. Employers need to reviewtheir selection process, to ensure its validity in producingrecruits who are likely to be good performers.

A poorly designed or implemented performancemanagement system. A performance management system


needs to establish clearly defined individual performanceobjectives for all employees.

Lack of development support. Individual developmentplans can identify competencies in which employees need toshow improvement. The plan should also include specificdevelopment objectives that will enhance performance inthose competencies.

Limited innovative work patterns. Organisations need tointroduce flexibility to their work patterns to attract staffwith caring responsibilities. This may otherwise result inunnecessary absence.

Absence of policies to manage poor performance. Successfulorganisations are more likely to implement policies effectively,with respect to the management of poor performers,compared with average-performing organisations (Axelrodet al., 2002).

The role of the line manager

As Tamkin et al. (2003) argue, managers feel torn between hardand soft management styles. On the one hand, they feelpressured to demonstrate excellent soft skills to maintain morale,commitment and motivation. On the other, they have to respondto the demands on increasing output, dealing with poorperformance, and hitting stretching targets. Their toughest skillchallenge is how to give negative feedback in relation tomanaging poor performers. Poor performance can often becaused by managers not outlining or clarifying the standards thatare expected. Senior managers may not have the background,inclination, or time to explore these issues with poor performers.Instead these employees can find themselves tolerated, demotedor terminated (Duncan, 1997).

Individual factors

For the organisation, the ‘knock-on effect’ of someone not doingthe job properly can be wide ranging (Goldman and Lewis,2002). Poor performers may cover up their shortcomings byblaming and bullying others. However, there are backgroundcharacteristics that may lead to employees being unfairly labelledpoor performers.


Ethnic background

Rick et al. (1999) found that ethnic minority employees werelikely to be found in disproportionately high numbersexperiencing disciplinary action in a number of local authorities,or to have their good performance attributed to luck or ease oftask. In the same study, when employees were asked to thinkabout excellent performers in their organisations, ethnic minorityemployees were less likely to be given as exemplars of excellentperformance, and were over-represented in the poor performercategory, ie biased mental models of performance.

Personal circumstances

In many cases, it is likely that poor performance is being causedby circumstances in the employee’s personal life. Bereavement,the break up of a relationship, financial worries, the birth of achild, drug abuse, and ill-health will all impact on an employees’work performance. Any ethical employer should spend time toidentify what personal factors may be influencing an employee’sperformance, and should give as much help as is reasonable interms of extra-time off, counselling etc.

Sickness and absence

Research evidence shows that, for some employees, absence is amechanism for avoiding specific aspects of work that areperceived to be unpleasant. The need to avoid emotionallydemanding, or stressful situations in the workplace may alsoresult in absence. Some of employees’ sickness levels can beattributable to characteristics of the workplace, which can beaddressed by management actions (Bevan and Hayday, 2001).

2.6 The legal framework

Recent high-profile examples of organisations being sued forracial, age, or gender discrimination after having implementedsystems to identify poor performers, may prevent organisationsfrom addressing the issue (Rogers and Davis, 2002). Fear oflitigation occupies the minds of HR and others’ in organisations.Given that dealing with poor performance may eventually leadto disciplinary action, which could lead to dismissal and, if not


handled correctly, to court, this is a lengthy and risky process.Although it is beyond the scope of this research to examine thelegislation, HR and line managers need to understand legalemployment requirements.

The legal and anti discriminatory framework*

• Employment Relations Act 1996

• Employment Rights Act 1996

• Employment Act 2002

• Sex Discrimination Act 1975

• Race Relations Act 1976

• Race Relations (Amendment) Act 2000

• Disability Discrimination Act 1995

• Employment Equality (Sexual Orientation) Regulations 2003

• Employment Equality (Religion or Belief) Regulations 2003

*some of the relevant regulations, but not an exhaustive list

Managers who are being asked to deal with poor performersshould receive full support from their human resources and legaldepartments. Faced with operational constraints, they may bemore intent on removing the employee, which can conflict withHR advocating the protection of employees and the legaldepartment avoidance of all legal risks.

According to Gennard and Judge (2002) dealing with poorperformance is a legal minefield. Poor performance is legallydefined as ‘when an employee’s behaviour or performance might fallbelow the required standard’. Perhaps this is the clearest definitionwe have encountered so far. Nonetheless, the picture muddieswhen we consider the reasons. According to the EmploymentRelations Act 1996 it can be fair to dismiss an employee for:

showing insufficient capability or qualifications showing inappropriate conduct redundancy breach of statutory provision for ‘some other substantial reason’.


This might explain why some employers tend to confuse poorperformance with negligence, incapacity or misconduct. The lawdoes not differentiate these clearly. This is to a large extent due tothe fact that the divide between gross misconduct rules inemployment and poor performance is not clear-cut. It is difficultto incorporate rules about poor performance into rules inemployment (eg time-keeping; absence; health and safety;misconduct; use of company facilities; confidentiality anddiscrimination). Similarly, there is a need to adapt to differentcompany cultures, so it is important to provide employees withclear guidelines of what is acceptable in the workplace for bothbehaviour and performance.

Employers are required to follow, and demonstrate they haveapplied, the principles of:

fairness consistency natural justice.

The Employment Act 2002 has taken procedural fairness a stepfurther. It refers to the Employment Rights Act 1996, which statesthat if the employer fails to follow or complete the procedure, anemployee who is dismissed as a consequence will have beenunfairly dismissed. It is further reinforced by the requirementthat procedural arrangements are complied with before cases arebrought before employment tribunals and there is a provision fora ‘cooling off’ period so that both parties can seek a compromise.

This chapter has explored what is meant by poor performance.Defining poor performance in an organisation may be shaped bya variety of factors derived from a broad spectrum of interests, egbusiness, HR and employee rights to name but a few. At theorganisational level, however, these still remain somewhatremoved from individual employees — we explore whether themeasurement process may be more successful in communicatingclearer messages about performance.


Summary

3. Measuring Poor Performance

multiple levels of acceptable performance

objectives are the cornerstone

spelling out negative behaviours is useful

appraisal, but evidence from several sources

organisational league tables disliked …

… but moderation/calibration validate

crossing the line: the grey areas.

Both from a point of view of the overall organisation and thelegal framework, the previous chapter put poor performancesquarely at ‘below standards’ or ‘below expectations’. This is,therefore, key to measuring poor performance, but:

is it the employee or something else? is poor performance bad or just average? is performance absolute or relative?

3.1 What is acceptable?

Employees need to know what constitutes an acceptable level ofperformance, below which their organisation will consider theirperformance to be wanting. Not so easy when we look at thevariety of messages that they may receive from their employersabout performance requirements, as Figure 3.1 demonstrates.Performance requirements may vary according to the jobs, thelevel of skills and seniority amongst other things and could be


facilitated, or indeed hindered, by the presence and effectivenessof other HR policies and practices.

Given these conflicting messages, it may be difficult for anindividual to have a clear view of what is meant by acceptable.The onus is, therefore, on line managers to instil some much-needed clarity, and for both parties to agree a standard ofperformance as well as the targets to be delivered.

3.1.1 Is performance appraisal the bestvehicle?

Previous IES research, based on almost 1,000 managers showshow performance review is becoming an over-burdenedmanagement tool. Line managers are additionally expected toidentify staff training needs, provide career counselling, spothigh flyers of the future and manage poor performers. Whileeach of these is a legitimate part of managing, in seeking to do so

Figure 3.1: What is acceptable performance?

Lack ofcapability

Inappropriatebehaviour

Performancerequirements

• standards• targets• SMART objectives• competence

Jobs

• staff groups• grades• specialist• function• project team• job moves

HR policies &practices

• psychologicalcontract

• appraisal• absence• code of conduct• capability• disciplinary

Acceptableperformance

?

Source: IES, 2004


many things at once, it is hardly surprising to find that manyappraisal schemes fail to deliver any of them effectively (Strebleret al., 2001).

According to a recent survey conducted by IRS (2003), only 17per cent of the 95 employers responding used appraisals toidentify and deal with poor performance. Much emphasis wasgiven by our employers to addressing performance issuesinformally and as soon as they arose — and most likely outsidethe performance appraisal process. This was often referred by themanagers we interviewed as ‘micromanaging’ (eg setting clearexpectations and monitoring progress). It could be argued thatthis should form part of an effective performance review processin the first place. Nonetheless, even a well-thought outperformance management system will be ineffective if managerslack the competence and confidence to use it. Managers wouldbe better prepared if their training focused on writingmeasurable objectives, assessing and evaluating competencies,and interacting effectively with employees. These interactionskills will enable managers to effectively reach agreement onperformance expectations, provide honest feedback, coach poorperformers and discuss the repercussions of not improvingperformance. There will obviously be times when using aseparate policy, such as a capability procedure, will be calledupon (see Chapter 4). The efficacy, or otherwise, of performanceappraisal in dealing with poor performance rests on the extent towhich the performance is unacceptable, which in turn dependson the accuracy of performance measurement.

3.2 The performance measures

It may not be surprising by now that there are also many waysthat an organisation measures the level of performance to assesswhether it is good or bad, as shown in Figure 3.2. All ouremployers were using both hard and soft measures to assess anindividual level of performance shown in the outer ring. Theydiffered in how they combined these to obtain a rating and inwhat kind of benchmark they used.


3.2.1 Outputs are key …

The outputs achieved would be the most important measure ofperformance in our organisations. Failure to achieve them wouldobviously be a signal for investigating the level of performancefurther. To this end, most of the HR managers interviewedwould look for the objectives set as a first step when a potentialpoor performer was identified:

‘We turn to the list of objectives set as the cornerstone formeasuring poor performance.’ (Manager in a financialorganisation)

But how representative is this list when, as shown by anothermanager, the difficulty level of objectives has changed and theonus put on ‘value added’ is much greater?

‘Historically the big change for us was IiP and, in particular,business planned deployment — it is not around every dayobjectives but stretch.’ (Senior manager in a manufacturingorganisation)

Or some of these are more critical than others …

Figure 3.2: The performance measures

outputsachievedtargets

inputsobservedbehaviour

externaltests of

capability

rankingrelative orabsolute

Source: IES, 2004


The criticality factor

• critical (can only remove or demote someone for failure to achievethis)

• non-critical

• additional

… or opportunities or autonomy to achieve targets may dependon the role, function or location or part of the business theemployee is working for. For example, objectives may be difficultto set for low-complexity job contents, which rely on delivering anumber of prescribed tasks. Or simply, as is often the case, thatsome line managers are themselves poor at setting SMARTobjectives and assessing whether they have been achieved.

3.2.2 … but can competencies help?

Arguing that it is not what is delivered, but how it is deliveredhas become somewhat of a cliché. Nonetheless, competencyframeworks, which were used by all our case studies, deserve acloser look in terms of setting behavioural indicators of poorperformance. Indeed, as our discussion on the legal frameworkshows, these may be the only way to communicate some of thenegative behaviours, eg poor timekeeping, unwarranted absenceetc. (see section 2.6). Again, there are a number of caveats whichmay limit the effectiveness of the assessment.

How many of these competencies are critical or optional?Work on assessment shows we can only excel at a few.

Are there levels of performance or job requirements that areattached to each? Employers are beginning to discardperformance levels as staff did not readily accept them norwere they used appropriately, and it was difficult todisassociate levels of performance with levels of seniority.

Are behavioural examples of what is considered poorperformance by the organisation included? While it isunderstandable that organisations wish to reinforce apositive message, actions that are not helpful to the businessare unequivocally spelt out (Warner, 2002).

Has the competency language been diversity proofed? Whiteand minority ethnic employees, for example, can use quite


distinct but different types of competencies when describingthe performance of individuals (see section 3.4.2).

Are the appropriate weights given to competence andbehaviours in order to arrive at an overall performancemeasure?

3.2.3 What counts as evidence?

Some employers are relying on external tests of capability. Thesemay be administered in an assessment centre setting, or by anexternal consultant, for an individual assessment diagnosis.Employers should be mindful that some of these tests may not berepresentative of performance in current job.

‘If two employees are told to improve their sales presentation skills,one may be judged merely on how they were ranked in a trainingsession, another on whether they delivered a predeterminednumber of live presentations and how the clients responded. Thoseare two different goals, and more importantly, two very differentsets of measurement — one a formalised training process, theother a live sales scenario.’ (Axelrod et al. 2002)

Feedback from other sources such as boss, peers, subordinates,and external customers is increasingly sought. Previous IESresearch found that multi-source feedback had a positive impacton staff motivation and increased their belief that their managerwas as accurate as possible in judging their performance(Strebler et al., 2001).

Bearing in mind the issues surrounding objective setting andcompetency descriptors discussed above, these have to becombined somehow to obtain an overall measure ofperformance. The employers in the study did this with variousdegrees of transparency. One approach was to ask managers toproduce an overall rating, taking account of the achievement ofobjectives and demonstration of competencies. Anotherorganisation asked managers to give an overall, but separate,rating to objectives and to competencies (from outstanding,valued contribution to below expectations). These were thencombined into an overall score. The permutations were such thatsomeone with an outstanding score on objectives orcompetencies but below expectations on the other, ended uplabelled a poor performer.


3.2.4 Spotting poor performers

Most of employers in our research used a process of standardmonitoring or calibration. One organisation had a cascadingprocess that involved calibrating staff performance from theindividual, to functions right through to the whole organisation.The approach to spotting poor performers adopted by themanufacturing organisation (see Figure 3.3) is helpful towardscommunicating a clear message about current performance andfuture prospects within the organisation, rather than a nebulousconcept of ‘the best’ as done by others.

3.3 Poor or simply not the best?

The aggregated measures of individual overall performance areoften arranged into some kind of forced ranking. At the core ofFigure 3.2 (discussed earlier) is also whether the forced rankingis judged with regard to other employees’ performance ierelative, or whether it applies a standard, ie an absolute level ofperformance. Examining how organisations used forced rankingchallenges the opinion of a senior manager in one of our case

Figure 3.3: Organisational approach to spotting poor performers

Potential Actions

High potentialseveral movesup

• new to role• coaching• change role

Potential forone move up

• new to role• coaching• change role

May developwithin theband

• new to role• coaching• change role• exit

No potentialupwards or incurrent role

• selection error• redeployment• exit

Performance Unsatisfactoryperformance

Satisfactoryperformance

Superiorperformance

Distinguishedperformance

Source: IES, 2004, adapted from the manufacturing organisation


studies who thought that employees have a view about theircontribution.

‘Most people know how they are adding value.’ (Senior Manager,manufacturing organisation)

3.3.1 Is poor performance normallydistributed?

Forced ranking requires an organisation to decide what would bean appropriate distribution of ratings. These may be derivedfrom identified performance gaps and improvements requiredby the organisation. Targets are then set for the percentage ofemployees expected to fall into each category. A typical bell-shaped distribution, also known as the vitality curve, would aimto have ten to 20 per cent of top performers and five to ten percent of lower performers with most of the staff as the middleaverage performers (Rogers and Davis, 2002).

3.3.2 … or are poor performers at the bottomof the league table?

Some organisations assert that poor performance is relative. Inline with this, poor performance is not necessarily unacceptableperformance. Employees who are incompetent or unethicalshould easily be dealt with through normal disciplinary anddismissal procedures. However, some employees may deliveracceptable performance but, compared to their better performingcolleagues, they are still poor performers. This creates a sort oforganisational league table.

This ranking is then typically used to determine performance-related pay. The data can also be converted to identify employeeswhose relative performance is unacceptable. In theory, by gettingrid of the bottom performers, the company improves the averagelevel of performance, raising the performance level for the rest ofthe employees in subsequent years. In many organisations,forced ranking is evolving into a highly sophisticatedmeasurement activity, supported by a growing array of softwaretools and business processes.


3.3.3 Either way forced ranking is a demotivatorfor all except the very best

Organisations using ratings in this way put faith in a system tomodify performance rather than encourage line managers to dealwith poor performance issues. Forced ranking causes low moraleand encourages staff to compete against each other. In fact, insome cases forced ranking may ultimately cost the organisationmore than if the poor performers were just tolerated. Recently, anumber of high profile lawsuits in the US have forced manyorganisations to reconsider using forced ranking. For example,the Ford Motor Company’s system graded employees A, B or C.The intention was to remove C performers. Instead, Ford landedup in court. Six lawsuits were filed by irate employees, andsubsequently the system was changed (Rogers and Davis, 2002).Furthermore, an employee who receives consistently negativeperformance feedback may be more likely to experienceemotional exhaustion than a person whose feedback is generallypositive (Brown and Benson, 2003).

3.4 Crossing the line: the grey areas

Figure 3.1 showed that crossing the line below ‘acceptableperformance’ may involve employees lacking capability ordisplaying inappropriate behaviour. There are several areaswhere crossing the line presents a rather complex picture.

3.4.1 What makes a good day’s work?

Sometimes employees are present at work, but not reallyworking. It is difficult to define what means a fair amount ofwork. This may also be linked with sickness absence, where it isdifficult to tell if sickness is legitimate. However, the presentingproblem might be quite deceptive, as one of our line managersexperienced.

A performance problem resolved by increasing workload

A manager was confronted with a problem with a member of theteam who was dismissive, was surfing the Internet and using hermobile phone, and not producing the quality of work expected. Sheexplored reasons behind it first and then called a meeting to deal withit informally. She explained the need to demonstrate value. Initial


improvement tailed off so the employee was put on formal stage 1.The manager gained her trust and tried to help. It turned out she wasbored and wanted to be kept busy and appreciated.

3.4.2 Beware of culturally defined behaviours

Sometimes, behaviour does not conform to the expected standard,or its value is perceived differently depending on differentcultures. White raters, for example, favour management skills,knowledge of organisation, and cognitive competencies whereasminority ethnic groups favour organisational skills, timemanagement, team working and self-management (Rick et al.,1999). It can be argued that the former competencies would beones that get you noticed in an organisation.

3.4.3 Is the employee in control and willing?

Organisations need to be aware of the ACAS Code of practice forseveral reasons (ACAS, 2003). It distinguishes between capabilityor conduct because they have different procedural steps. Thelatter has a more formal procedure. The notion of ‘within theemployee’s control’ is included so that an employee capability orinefficiency may be disregarded if it is for reasons outsidehis/her control (eg lack of skills for a post, or short or long-termhealth problems). A further notion of ‘employee willingness’ isadded so that there is a conduct problem if the member of stafffails to knowingly do something that he or she is capable ofdoing (eg because of laziness, carelessness, attitudinal andworking relationships). The psychological contract mentioned inFigure 3.1 refers to the employment relationship as one of mutualtrust. The following incident demonstrates that both improvedperformance and trust are needed to resolve a poor performanceissue.

Trust broken

A manager identified an employee whose performance was belowstandards. She told the individual and set objectives to deal with theissue. There were mitigating circumstances in that he had problemswith his partner. They spoke weekly and gradually attendance andperformance improved. Meanwhile, the manager discovered thatthere had been a breach of confidentiality with another manager;trust was broken and the employee left.


This chapter reviewed the ways in which employers measurepoor performance. The messages about what employers mean byan acceptable level of performance can be confused and dependon line managers’ consistency of approach. Some of the measuresof poor performance, such as the lack of achieving objectives orinappropriate behaviour, however easy to observe, are stillsubjected to factors beyond an individual’s control.Organisations need to be aware of the dangers of discriminationand the impact of using forced ranking either relative orabsolute. This is likely to affect the approach that employers putin place to deal with poor performers.


Summary

4. Dealing With Poor Performance

to decide whether to improve or remove

informal vs. formal procedures

common practice is the capability procedure

organisations have a list of poor performers

why line managers don’t act

equipping line managers to deal with poor performers

TAPS — a simple mnemonic

The issues of definition and measurement, discussed in theprevious chapters, are partly affected by what people think theirorganisation is going to do with poor performers.

How do approaches vary depending on whether the ultimateaim is dismissal or development?

Is the capability procedure a means to act to avoid litigation? What can we do to help line managers deal with the issue?

4.1 Organisational approaches: improve orremove?

Aside from the other factors discussed along the way, such as areview of the selection process to avoid recruiting poorperformers in the first place, organisations need to put in placean overall approach and procedure to deal with poorperformance. The approaches to deal with poor performance,which we encountered in our case studies, seemed to cluster


around two important, but diametrically opposite, dimensions,as shown in Figure 4.1:

whether the organisation’s ultimate aim was to improveperformance or remove the employee

the degree of formality of procedure used to achieve their aim.

If all else fails, however, approaches are not mutually exclusiveand all of our employers would invoke some more formal andfinal measures, such as a disciplinary policy.

4.1.1 Improving performance

Some organisations adopted a developmental approach, believingthat employees’ performance could be improved. Their

Figure 4.1: Organisational approaches to deal with poor performance

the capabilityprocedure

assessmentcentres

play to people’sstrengths

feedback andcoaching

trainingindividuals

Informal Formal

Improve

Remove

procedure

theperformanceimprovement

plan

developmentcells

training linemanagers

list of poorperformers

exit

get rid ofbottom10%

redeployment

appr

oach

Source: IES, 2004


intervention, therefore, included a sharper focus on training anddevelopment. In this case, a varying degree of formality of theprocess used was also in evidence. Towards the more formal endof the procedure, but still with an improvement emphasis, wefound the approach that the manufacturing organisation haddeveloped, ended in a performance improvement plan.

Discussing poor performance is legitimate

At the manufacturing organisation, all senior managers regularlydiscuss the performance of their people at development cells held ona monthly and quarterly basis. Discussions include lower performersand possible causes, roles, problems and issues. There is a ‘lowerperformers’ list. Managers talk about what individuals could do toimprove their performance, if only they knew this can be followed byvoluntary severance discussed with the union. Individuals receiveinformal feedback confirmed by a formal letter, about the company’sviews of their performance and potential. There is a validation of theexercise by another manager, usually from HR.

At the other end of the spectrum lies the approach adopted bythe electronics company, which believed in informally matchingpeople to roles according to their strengths.

Playing to people strengths

The electronics company separates reward from development anddifferentiates between performance and potential. Individualperformance against objectives is compared against a peer groupcalibration. This highlights the strengths and gaps early on in anindividual’s career with the company. An ‘individual strengths’ profileis used to assign project responsibilities and new roles. Managers areencouraged to focus on performance gaps and coach individuals tomeet expectations. The company also uses more formal processes ifneeded.

While all organisations would ensure that adequate training wasprovided to individual employees, the approach taken by thecounty council was to formalise their procedure and educatetheir managers.

Tightening the process via manager training

Being rated average but a safe authority as a result of a CPA exercisewas one of the drivers prompting the Council to review itsperformance. Staff survey results also revealed that only 45 per centof its staff believed their manager was effective at tackling poor


performance. Wanting to tease out performance issues, they havedeveloped strategies that include a moderation system and a trainingcore module for line managers.

4.1.2 Removing employees

As far as we could tell, none of our case studies espoused thedrastic, and much disliked, removal method adopted by someprivate sector companies in the United States (see also ourdiscussion of forced ranking in Chapter 3).

Getting rid of the bottom ten per cent

‘Forced ranking is used by an estimated 20 per cent of US companies.Companies such as General Electric, Sun Microsystems and Conocofind forced ranking systems beneficial because they encouragemanagers to identify and remove those who are ineffective and forcea predetermined compensation distribution curve in which topperformers are rewarded and poor performers are forced to eitherimprove or — more likely — move on.’ (Rogers and Davis, A PoorWay to Manage Poor Performers, p1, DDI, 2002)

But pressure to move towards such an approach could be sensedduring our discussions. The central government agency, forexample, used a not too dissimilar process to review thecapability of its senior managers.

Starting at the top

This public sector agency needed to move from a family workingenvironment to a seller of products operating in the private sector. Anew CEO decided to address leadership style and change its culture inthe process. All senior managers attended an assessment centre ledby the board. This resulted in 50 per cent of longer-serving managersleaving the organisation. The organisation has also introduced a morestringent selection process, the need to manage performance as amanagerial objective and a potential development centre.

4.1.3 The list of poor performers

Either explicit, as in our example from the manufacturingorganisation above, or implicit as in some of the otherorganisations we talked to, the list of poor performers seemedubiquitous. HR and senior management could use it for:


identification of training needs, obsolete skills and compe-tencies

as part of a resourcing strategy, possibly leading toredeployment

standard and diversity monitoring and calibrating across theorganisation (see also Chapter 3).

For the latter, one employer used the list anonymously — askingHR to remove the names before it was presented to management.Despite this laudable attempt to minimise the impact onindividuals, organisations need to ensure that people on theirlists are real poor performers (see our discussions of other factorsthat may impact on performance in the previous chapters).

4.2 The capability procedure

All the organisations in our study have, or had recently,introduced or reviewed their capability policy. The capabilityprocess followed was clearly illustrated by one of our casestudies as a series of steps (see Figure 4.2). We reviewed thesepolicies and procedures using the following criteria to assesstheir effectiveness:

how clear the process was number of warnings improvement periods roles and responsibilities of key players user-friendly and practical single source of guidance use of positive guidance, as well as formal procedure communication and dissemination integration into mainstream training (eg induction, manage-

ment training etc.).

Our brief trawl of six policies/manager guidelines revealed that:

All policies score for clarity, numbers of warnings, the keyplayers involved, being fairly user-friendly and communi-cation to staff (either via staff handbook or Intranet or both).

Numbers of warnings vary from one to three and whetherthere is one informal stage.


Figure 4.2: The capability process

Review meeting

Stage 2 monitoring period: 1 to 3 months

Stage 2: Issue Stage 2 letter

Has theemployee met the required

performance level?

Review meeting



Has theemployee met the required

performance level?

Yes

Non-redeployment — EXIT

Notice period (cont. redeployment)


Has theemployee found suitable

redeployment?

Yes

Review meeting



Inform employee of start of capability process

STAGE 1

STAGE 2

STAGE 4

STAGE 3

Yes

Start

End

End

End

End

Source: IES, 2004, adapted from the manufacturing organisation


The recommended minimum length for each period ofimprovement is not always included, but when it is, threemonths is the usual period.

The extent to which the policy is couched in more positiveterms (eg endeavouring to support staff, identification of otherfactors, such as sickness, action plans) is fairly limited, as isthe extent to which it is integrated into mainstream training.

Separating poor performance from conduct

The Service provided by the central government department hadreviewed its policy and separated it from disciplinary issues. It spellsout the content of the discussion with the jobholder and the need toconsider the reasons for poor performance; to identify theperformance shortfall and to agree the action to be taken. Thereasons when staff may be eligible for compensation are alsoincluded namely: domestic responsibilities where the job holder (JH)has made every effort to alleviate the problem but management hasbeen unable to; introduction of new working practices: where apreviously competent JH has failed to adapt despite training;promotion: when a JH is promoted beyond capabilities; managementtolerance: where a pattern of poor performance has been allowed todevelop unchecked over a number of years.

The capability procedure is also the means to documentperformance issues, which is the key to being able to act.However, evidence also needs to be collected earlier on as part ofthe appraisal process. Most organisations should clearly spell outthe link, or the difference, between their capability anddisciplinary procedures as the boundary is often blurred.

4.2.1 Redeployment

Most of our case studies have a redeployment process, althoughsome are more explicit than others are. In the case of themanufacturing organisation, it has extended the process intoproviding employees with much support to find suitable jobs,either inside or outside the organisation. Employers need toreview their redeployment process carefully to avoid anyunnecessary stigma for employees. In our experience, employee’send up on the redeployment register for all sorts of reasons, notall of which are due to poor performance. Employees who arenot terminated are deemed to be of value to the organisationalbeit in a different, and perhaps less demanding, role.


4.3 Are line managers equipped to deal with it?

Many managers ignore the problem — hoping it will go awayand then get angry when it resurfaces. Others, with wider spansof control, may not notice there is a problem. Interviewees gavenot mutually exclusive but colourful reasons for managers notdealing with performance issues.

Why line managers don’t act?

• don’t spot there is a problem

• afraid of dealing with it

• ‘bury head in the sand’

• don’t know how to

• no time

• not accountable

• fear it reflects on own performance

• poor performers themselves

• don’t realise mechanism in place to deal with it

• moving on

4.3.1 Managers need to be trained …

Managers were provided with much guidance but often expressedthe wish to discuss performance issues in more depth. Some of thetraining packages introduced by employers were thorough.

Training line managers to use the capability process

The manufacturing organisation provides managers with a 10-stageprocess including:

• a business communication

• pre-briefing by manager

• pre-work and three-skills practice workshops (day-to-day perfor-mance, information gathering and recording, simulated scenarios)

• observed real life performance discussions

• process evaluation.


4.3.2 … should get support from theirorganisation …

The manufacturing organisation gave its managers a lot ofcredibility and recognition for dealing with a performance issue.The overall process, which involved senior management assessingand communicating both potential and performance level, alsosupported them. HR was seen as a good source of support bysome, particularly in articulating the guidance and pre-emptingissues as well as getting informal support.

4.3.3 … should be good at spotting problems …

Thus identifying true poor performance involves the followingsequence:

Table 4. 1: Identifying true poor performance

Sequence Response

Is there a performance problem? check control & willingness; other factors

Is it at an acceptable level? check against standards and competenciesand criticality factor

Whose problem is it? determine whether manager or individual

What is the most appropriate response? training, new manager, action plan improve orremove

Source: IES, 2004

4.3.4 … and take action early

The most common message emerging from the study is the needfor managers to deal with issues early rather than let them getworse. We would like to offer them a mnemonic as an illustration

Figure 4.3: Turning on the taps: encouraging line managers to deal with poor performance

T timely and early

A appropriate management style and response

P keep it private

S make it specific to performance and factual

Source: IES


of good practice. In most cases, dealing with poor performance isa bit like turning on the taps (Figure 4.3 above).

4.4 Termination of employment

When all avenues have been explored without success, there maybe no alternative than to exit the employee. Termination shouldnot come as a surprise to the employee if adequate and honestfeedback has been given throughout the improvement process.Most employers were providing support to employees such asoutplacement and help to find other employment. Individualseverance packages were also being used, although informationon these was obviously not widely available.

Several approaches to dealing with poor performance emergedfrom this chapter. The most important dimension, however, iswhether employers want to improve or remove the employee.Strategic choices will be influenced by the organisational culture,its beliefs in employees’ values, and the effectiveness of itsemployee policies and practices.


5. Tackling Poor Performance:The Strategic Choices

Ultimately the approaches depend on the organisations decidingwhat they are really trying to do with poor performance.

Do they weed out small numbers of staff who are incompetentor abuse the system (absolute measures)?

Do they redefine performance or assess performance to effecta radical culture change (relative measures)?

Do they want to improve performance using a moredevelopmental approach?

5.1 Weeding out small numbers

The definite advantage of weeding out small numbers ofpersistently poor performers is that this group has a big impacton the rest of the workforce, in terms of giving the message theorganisation is serious about poor performance.

It is easiest when clear performance targets can be set as inmore prescribed roles and clearly measured outputs — moredifficult with more complex and less defined roles (eg harderfor managers).

It is easier to tackle abuse (eg Internet shopping at work) thanlack of capability.

It needs a clear procedure and thoroughly documenting Care should be taken about sickness absence where it could

be better handled by occupational health.


Different cultural assumptions about working practices,language skills and values need to be checked for minoritygroups.

5.2 Losing the worst, keeping the best

This is clearly in vogue in the United States. The forced rankingapproach is often about ratcheting up organisational performanceby getting rid of the lowest performers — often average ratherthan poor. It is becoming trendy within the UK public sector. Theexpected result is that the whole organisational performance willbe raised.

This assumes that the organisation not performing is downto individuals. This is a tricky argument that may result insenior management passing the buck to middle managers.

Ford’s experience demonstrates that it can be legally difficultto defend. Is being average grounds for dismissal?

The evidence of performance in forced ranking may not behard evidence; assessment centres measure skills not outputs.

Works on the assumption that ‘once a poor performer alwaysa poor performer’, ie need to give people a chance to change.

Could be discriminating against long-serving staff who arelikely to be older.

There is a danger that organisations may recruit more peoplewho may not be better.

5.3 Improving performance

It may be better not to call this poor performance since it is oftenabout re-energising people, improving their skills andcommunication. However, in order to encourage line managersto deal with improving performance, this should be part of theirobjective and they should be measured on its delivery. It shouldbe a clear process, which needs to be firm and focus on specificaspects of improvement and needs to be distinguished fromdevelopment and focused on the current job to avoid raisingexpectations –- in particular of unions. This approach wouldwork if organisations would adopt a collaborative approach,where senior managers work with colleagues to support the lineto maximise the contribution of all.


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